Canadian power company settles price manipulation claim with California

SAN FRANCISCO -- California Attorney General Kamela D. Harris on Friday announced a $750 million settlement with a Canadian electricity marketing company accused of manipulating the price of power during California energy crisis in 2000 and 2001.

Under the settlement, Powerex, a subsidiary of BC Hydro, will pay the bulk of the money to ratepayers of California’s largest utilities, including Southern California Edison, attorney general’s officials said in a written statement.

The settlement will come in the form of a $273 million cash payment, along with a $477 million credit, according to the Vancouver Sun.

According to the attorney general’s office, the company engaged in “market gaming” by purchasing large quantities of electricity that was needed in California, then selling it back to the state at “exorbitant prices.”

Beneficiaries of the settlement include the Department of Water Resources’ California Energy Resources Scheduling Division, the Public Utilities Commission, Pacific Gas and Electric Company, San Diego Gas & Electric and Southern California Edison, officials said.

“During the energy crisis, CERS purchased energy on behalf of California (investor-owned utilities) to help keep the lights on for customers,” according to the attorney general’s office statement. “The Public Utilities Commission will determine how settlement funds will flow to the ratepayers of the investor-owned utilities.”